One Market is Solid
by Laurel S. McQueen

Despite new leasing of over one million square feet, move-outs of the same magnitude pushed net absorption for the Tampa Bay region into net occupancy loss territory during the first quarter. Only Sarasota and Manatee counties moved into the year with solid numbers. The rest of the market either stagnated, or slipped and fell.

Hillsborough County's annual absorption fell 33 percent while the vacancy rate moved up 2.8 points. Over 400,000 sf of sublease space appears in our survey charts, which is not included in the numbers. If this empty space was included, the county vacancy rate would climb to 18.8 percent. Class A space saw net quarterly absorption of 92,850 sf and a vacancy rate of 15.2 percent. Over one million sf was added to existing space this quarter with new construction and previously owner occupied buildings that are now available.

As tenants continue to move around downtown and consolidate space, this sub-market's vacancy rate climbed 1.3 points. Most of the movement is in Class A buildings, increased vacancy to 11.5 percent. Downtown's average rent dropped $.75 from the fourth-quarter level. Two new buildings opened in Westshore, adding nearly a half million sf, and combined are 62 percent leased. Westshore's average rent edged up $.11 per sf. Class A space rents for an average of $22.11 per sf and is 14.5 percent vacant.

The I-75 Corridor market changed substantially with this quarter's survey. Netpark @ Tampa Bay was moved here from the North Central market. Breckenridge IV & V and University Business Park Center were moved to the office survey. Regency 200, a build-to-suit for Coca-Cola, was added to Regency Corporate Park. And the old Citicorp building at Corporex Park is back under the new name Teleplace. The net effect is the sub-market grew by 1.2-million sf.

Pinellas County reported a sizable loss in occupancy. All five sub-markets saw losses or broke even. The vacancy rate moved up 2.3 points, while annual absorption dropped 82 percent from fourth quarter. Average rents dipped $.14 per sf. In the northern part of the county, Countryside edged up to 10.1 percent vacant, downtown Clearwater to 14.8 percent and Dunedin-Palm Harbor area slipped to 15.7 percent vacant. The vacancy rate in Gateway has climbed 14.7 points from 7.6 percent four years ago to 22.3 percent. This quarter's leap was 4.9 points while annual absorption tumbled 51 percent. Average rents dropped $.76 per sf.

Manatee County bucked the trend with its biggest quarterly absorption level in four years. The new building at Port Manatee is open and full, a new office park is going up on SR 70 near the Braden River, and things are buzzing at Lakewood Ranch Town Center. Annual absorption remains fairly low, as the past three quarters have been dismal.

Sarasota County also experienced a good quarter – mostly at Lakewood Ranch Corporate Center. Downtown Sarasota is currently 12.5 percent vacant, while the suburban market is at 11.4 percent and the Venice market is 23.7 percent vacant. The average Class A rent dropped $.55 per sf.

Little activity was reported in either Pasco or Polk counties, so vacancies remained stable. Rents dropped in Pasco and rose in Polk.

Office buildings which have been fully leased for two or more quarters do not appear in the survey charts. All office buildings continue to be updated in the database each quarter. Previous quarterly data is revised as new information is received. Survey charts may include sub-lease space, which is not included in analysis numbers. For questions regarding the survey, or to receive a full survey chart, send an email request to madduxresearch@AOL.com. Or, call the Maddux Report Research Department at 727/321-3225 or 727/823-4394.